The massive revelations in the Panama Papers have shined the starkest light yet on the vital need to fight corruption and end anonymous companies. Today, a group of leading organisations advocating for greater transparency in business, announced plans to create a Global Beneficial Ownership Register, a powerful new tool for exposing and ending the clandestine activities of anonymous companies, part of a broader effort to curtail the widespread global problem of bribery and other illegal activities.
The Global Beneficial Ownership Register (GBOR) would enable businesses to know who they are doing business with, financial institutions to know who their customers are, citizens to see who benefits from public funds, and law enforcement to hold individuals accountable for crime and corruption.
No global system for beneficial ownership transparency currently exists. The UK, Norway and Netherlands have all announced public registries containing beneficial ownership information. Even where progress is slow on the national level, sector specific projects such as the Extractives Industry Transparency Initiative, local governments such as Sao Paulo, or development bodies such as the World Bank are adopting similar requirements.
Corruption is bad for business, adding up to 10% to the cost of doing business globally, and is equivalent to a 20% tax on foreign businesses. It undermines competition and financial stability, and undercuts investments in human capital and sustainable development. Corruption is a global problem – but developing countries suffer the worst losses from illicit financial flows. Research by ONE Campaign showed this to be at least a trillion dollars a year.
“In this complex, globally connected world we live in today, knowing the true nature of companies is more vital than ever – without that companies, individuals, governments don’t know who they are working for, doing business with, or regulating. The Panama Papers have graphically shown the forces that are enabling companies to hide their true ownership for criminal purposes; we believe this register will provide a powerful antidote to this.”
Chris Taggart, CEO, OpenCorporates
“Corruption is a global problem and requires a global solution. It is crucial that individual countries prove their commitment to ending corruption by establishing public registers – we want to make this information as useful as possible by connecting the dots between companies and the people who control them across different jurisdictions.”
Maggie Murphy, Transparency International
“Fighting corruption, tax evasion and money laundering requires lifting the veil on anonymously owned companies around the world. Transparency also makes for a better business environment. The new global register will help to make sure that law enforcement, journalists, civil society and everyday citizens have the information they need to hold the powerful to account.”
Robert Palmer, Global Witness
“Use of these secret entities undermines trust in business, and drains countries of resources needed for their economic development. There is a compelling economic case that ending anonymous ownership is better for business. Transparent business ownership leads to improved competitiveness, greater financial stability and reduces risk and the cost of due diligence by enabling companies to know who they are doing business with.”
May Miller-Dawkins, The B Team
The register is being created by a coalition of international organizations, including Global Witness, ONE, Open Contracting Partnership, OpenCorporates, The B Team, The Web Foundation, and Transparency International. The register will promote beneficial ownership transparency, a system where the true owners of companies can be uniquely identified, eliminating the ability to use anonymous shell companies to hide illegal or corrupt activities.
An open and global register will accelerate this, combining public beneficial ownership data, and providing a platform for companies to self-disclose ownership information and encourage more companies to adopt this standard of transparency.
Making beneficial ownership transparency a global reality will increase competitiveness in national markets, levelling the playing field for all companies. It reduces risks associated with company efforts to manage their exposure in the highly complex global financial system. And it helps companies to understand who they are doing business with, reducing the costs of due diligence.
The first pilot of the Global Register is expected to go live later this year, and the organisations will be working with governments and intergovernmental organisations to implement this.
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This is a press release from opencorporates announcing this new initiative, which the Web Foundation is proud to support.